EOG's Utica Deal Reflects Solid Gas Demand: EQT, AR Stocks to Gain?

Deal-making in the U.S. shale patches is once again drawing attention in the oil and gas sector — this time in the Utica Shale play, where EOG Resources EOG has made headlines by agreeing to expand its footprint. Now, the billion-dollar question is: Does Utica’s stealing the spotlight signal a robust outlook for North American gas demand? And can EQT Corporation EQT and Antero Resources Corporation AR capitalize on the mounting interest in natural gas?EOG to Boost Footprint in Gas-Rich UticaTo bolster its position in the natural gas-rich Utica shale play, EOG Resources has agreed to acquire U.S. oil and gas firm Encino Acquisition Partners for $5.6 billion. From only 40 thousand barrels of oil equivalent per day (MBoE/D) in Utica, EOG will be boosting its production to 275 MBoE/D once the acquisition closes, likely in the second half of 2025. The production will become more gas-heavy – natural gas will comprise 45% of the post-acquisition production, which aligns with the mounting demand for natural gas. In other words, it can be said that EOG Resources is foreseeing a robust environment for natural gas demand. For more details, read our article: EOG Resources to Acquire Encino for $5.6B & Expand in Utica Shale.Natural Gas Price to Jump This YearIn its latest short-term energy outlook, the U.S. Energy Information Administration (“EIA”) forecasted this year's natural gas spot price at $4.10 per million BTU, significantly higher than $2.20 in the past year. Rising exports of LNG from the United States primarily contributed to the commodity prices. The electric power sector also requires more natural gas, aiding the pricing environment.Gas Explorers to Gain? EQT, ARThe strong North American gas demand, highlighted by EOG’s recent $5.6 billion acquisition deal and supported by a rising commodity price environment, signals a favorable backdrop for natural gas explorers and producers. Investors should keep an eye on two upstream energy majors: EQT Corporation and Antero Resources. Both stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Deep Inventory & Rising Prices Position EQT for GrowthEQT Corporation is among the leading natural gas producers in the United States, having a strong footprint in the prolific Appalachian Basin. In its first quarter transcript, EQT mentioned that it has sufficient premium sites in the Marcellus shale play that will enable it to keep drilling profitably for at least a decade. In addition, the upstream energy player owns key locations in the Utica shale that could support seven more years of drilling. The favorable natural gas prices are thus highly favorable for EQT.Limited Hedging Preserves AR’s Upside in Bullish Gas MarketAntero Resources is among the top five producers of natural gas and natural gas liquids in the United States. Notably, AR has sufficient proven key drilling locations that will help it to keep producing for at least two decades. AR, having a strong balance sheet, is thus well-positioned to capitalize on the favorable natural gas prices. Notably, AR is limiting its downside risk slightly while keeping most of its production unhedged to profit from the promising gas prices.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EQT Corporation (EQT): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis Report Antero Resources Corporation (AR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks